6 Recurring Business Expenses You Need To Consider

Running a business can come along with a lot of different costs. Startup and one-time costs tend to add up at the beginning, but there are also many associated expenses as you continue to run your business. Whether you are just beginning to consider opening your own company or you are established, here are six continuous expenses that you can expect to run up against.

1. Insurance

Your business may require a variety of types of coverage depending on what type of product or service you offer. You should obtain insurance quotes on property, liability and car insurance to make sure that you are getting the best pricing. If you need different types of coverage, you can often bundle the services together to get an even better rate. Since you will need to carry insurance for the duration, it is also a good idea to periodically recheck rates to make sure you are still getting a good deal. When you know your policy term is coming to an end, take a look at what current rates are with several companies and compare. Make sure that you are comparing similar coverages so that you don’t give up policy benefits unknowingly.

2. Rent or Mortgage

Unless you happen to already own the space where you will operate your business, you will likely need to consider rent or mortgage expenses. If you want more flexibility because you plan to expand or move eventually, it is best to find a good commercial rental space. A variety of factors will affect the cost of your rental, including location, size and amenities. Consider how much room you need for production or packaging, display space and office operations. You should also find out whether you have the option of painting or remodeling the space to fit your specific needs under your rental agreement. If you are looking for something more permanent with full flexibility to make changes, purchasing a space may be a better option. Regardless of which you choose, you will want to figure this large expense into your budget.

3. Utilities

Often business owners forget to consider the amount of money they will put into utilities such as gas, electric, phone service and water. You can usually obtain some historical data of these expenses when you are deciding on a location for your business. However, you should also think about what you will be doing in the space as this may greatly affect those estimates. If you will be running equipment, office machines, or both at once, you will likely see much higher electric costs than some other businesses. Water costs can also add up quickly if you are running a food-based business or something where cleaning up often is required.

4. Equipment

Purchasing necessary equipment can be quite expensive, but many forget about the ongoing costs of running the equipment. Office equipment may need software upgrades, printer cartridges, paper, toner or other miscellaneous expenses. If you use any equipment for production there will usually be regular maintenance costs. All types of equipment will eventually wear out and require replacement, so this is something else you should be accounting for. Having a plan in advance will help you avoid unexpected costs that you can’t afford.

5. Marketing

Keeping your business in demand and in front of the public is an ongoing process. Competitors are always looking to get a leg up on you so you need to make sure that you are investing in good marketing services at all times. Depending on the size of your business and your needs, you may need to budget for paid ads, sponsored content on the web, a website, social media ads and posts, promotional swag and marketing staff. The need for marketing never ends, but trends do change over time so you should be prepared to change up your marketing mix regularly.

6. Inventory

If you are in the business of providing products to consumers, it will be important to have an appropriate amount of inventory on hand. Maintaining your inventory will cost money and the amount you need will fluctuate throughout the year. You may find that you have busier seasons where you sell more and you should have the right amount of product on hand for this. You should also factor in the cost of storing your inventory and how long it lasts when determining exactly what your inventory levels should be.

Running a business means being prepared for anything. You should always be flexible with budgeting, but being prepared for these expenses will help keep you on track to success.